Pending Home Sales Fall the Most Since May 2010

Pending home sales have fallen the most since May 2010. The National Association of Realtors (NAR) is spinning this as potential buyers are being thwarted by a shortage of affordable homes because sales are so good.


Lawrence Yun, NAR chief economist, writes…

With demand holding firm this spring and homes selling even faster than a year ago, the notable increase in closings in recent months took a dent out of what was available for sale in May and ultimately dragged down contract activity.

Foreigners have bought billions of dollars worth of houses which has created a situation where there are not enough homes for domestic US citizens to purchase. As a result, prices are rising, and homes are once again unaffordable for most hardworking Americans.

[graphiq id=”bfXwkIACsh7″ title=”Median Home Sale Price in The United States” width=”460″ height=”602″ url=”″ link=”” link_text=”Median Home Sale Price in The United States | FindTheHome” ]

This Reminds Me of 2009 – 2010

We have to go all the way back to 2009 and 2010 to find a similar plunge in pending home sales.


Interestingly, here are the reports the NAR was publishing just before the entire housing market crashed and the Great Recession hit.

“Existing home sales at highest level since 2007… Similarly, robust sales may be occurring in November.”

“U.S. pending home sales surge… Pending sales of previously owned U.S. homes shot up by 6.7 percent in April, the biggest monthly gain in 7 1/2 years.”

The NAR is a cheerleader for the real estate market. The NAR is made up of salespeople, brokers, property managers, appraisers, and others who make money in the real estate industry. The NAR will never publish a forecast report that would scare potential property buyers because it would be contrary to their financial interests to do so. Knowing this, traders have to be careful looking to the NAR to guide their investing decisions.

PrivateBancorp Takeover Big +24% Win

February 28, 2016: PrivateBancorp to be promoted to S&P400 index after the close of trading on February 29, 2016. S&P SmallCap 600 constituent PrivateBancorp Inc. (PVTB) will replace Sirona Dental Systems Inc. (SIRO) in the S&P MidCap 400 after the close of trading on Monday, February 29, 2016.

February 28, 2016: PrivateBancorp to be promoted to S&P400 index after the close of trading on February 29, 2016. S&P SmallCap 600 constituent PrivateBancorp Inc. (PVTB) will replace Sirona Dental Systems Inc. (SIRO) in the S&P MidCap 400 after the close of trading on Monday, February 29, 2016.

Media Manipulation: 2nd Half Stronger Than First

The mainstream financial media is repeating the yearly claim that analysts say the second half of 2016 will be better than the first.

The media is reporting that analysts believe earnings growth will come in for Q3 2016 at +1.1%, and +7.4% for Q4 2016.

This prediction for stronger earnings in the 2nd half of 2016 occurs every year, at this time of year, in the mainstream media.

What is the reasoning for these fantastic projections of earnings growth? What is the catalyst that’s going to make magical customers appear out of thin air with money to spend? Fool me once, shame on you. Fool me twice, shame on me.
In 2015, I Was A Sucker

In 2015, I fell for it. It seemed reasonable that the second half of 2015 was going to get stronger. I don’t know why it seemed reasonable, it just did. Maybe the idea of oil falling seemed like it would have boosted consumer spending. I just bought what the media was shoveling and didn’t question it. The prediction by these so called “analysts” was that earnings would grow by +1.6% in the second half of 2015. The actual number was a contraction of -2.5%.

Think about it. Man can’t predict the weather more than two weeks out. How in the world could anyone predict earnings six months out?

The US economy has been slowing for more than a year now. Why in the world would earnings suddenly reverse and start to head back up? What is the catalyst for earnings growth? To say that earnings are going to grow, you are also saying that consumer spending is going to grow. How can that be when wages are low and good-paying jobs in the manufacturing and energy sectors are gone? Yeah, all those people that work at McDonald’s and Walmart, Yahoo! Better get ready for all that minimum wage induced spending coming in the second half of 2016. It’s absurd when you take the time to think about the mainstream media’s pitch that the latter half of 2016 is going to show earnings growth. Somebody at CNBC or Fox Business needs to practice better journalism and interrupt these fortune tellers and say, “Why! Are you just pulling out numbers from the clouds? Why are people suddenly going to have more money and start spending more in the second half of 2016 because, in essence, that’s what you’re saying.”

Our friends at FactSet published a report that shows these so called “analyst” predictions on second half earnings are usually wrong. FactSet writes…

Over the past five years (2011-2015) by June 28, analysts have overestimated the actual earnings growth for the second half of the same year by nearly 5 percentage points (4.7 percentage points).

Neutral predictions would dictate that the dataset would show some years analysts were over on their predictions, and some years they were under. The outcome would create a somewhat random distribution of analyst forecasts above and below actual earnings. Instead, FactSet shows a chart that every year since 2011, analysts have been over actual earnings on their estimates. These consistent overestimates suggest that analysts predictions are phony. They are made up out of nothing with the intent of manipulating the average amateur trader. Beware.

Jaw Dropping Chart Shows Severe Economic Contraction In 2016

This chart might be one of the scariest you will see this week. It gives a bleak picture of what is going on inside corporate America.

The number of companies increasing dividends per share has dropped by the most since right before the Great Recession.


Andrew Birstingl, Research Analyst for writes

But while DPS for the index has continued to rise, it has been doing so at a decreasing rate. Q1 was the second consecutive quarter that DPS has increased at a single-digit growth rate. This marked a divergence from the post-recession trend, in which dividends per share for the S&P 500 grew at double-digit growth rates.

Over the next 12 months, dividend per share growth for the S&P 500 is expected to slow to 4.9%. This growth deceleration has been a consistent trend over the past year for the index. Analysts are projecting that seven out of the ten sectors will see slower DPS growth over the next 12 months.

The economic slowdown in the first half of 2016 has hit corporate America hard. Most companies can not afford to increase their dividends as they have done the last seven years. Falling dividends make a lot of sense because earnings have been falling for more than a year.


US Banks To Be Decapitated If Brexit

If you are looking for a black swan event that could plunge the weak US economy into a full-blown recession, Brexit could be it.

Big US banks have already taken brutal losses over the last year.

Bank of America has more than $2.1 trillion in assets. Bank of Amerca’s stock has plunged -20% from a year ago.


Citigroup has more than $1.8 trillion in assets. Its stock is down a shocking -23% over the last year.


Wells Fargo’s has more than $1.8 trillion in assets. Its stock has crashed more than -15% over the last 12 months.


Major banks in the U.S. are in trouble as a result of years worth of low-interest rates. The Federal Reserve has been trying its best to raise rates to prop up falling bank profits.

With so many U.S. banks on the edge of the precipice, a Brexit could push them over the edge.

Daboo7 talks about how Deutsche Bank was caught illegally manipulating the price of gold.

Officials: California Blackouts Up To 14 Days Coming

The California state power grid operator informed millions of Californians they could suffer power outages of up to 14 days this summer. Folks, that’s long enough to kill people. Imagine people who are on ventilators, CPAP machines, or just live in scorching hot areas.

California recently overtook France as the world’s 6th largest economy. A 14-day disruption of power in California would impact the entire U.S. economy.

With record-setting heat and air conditioning demand expected in Southern California, the state’s power grid operator issued an alert urging consumers to conserve energy to help prevent rotating power outages.

All customers, including homes, hospitals, oil refineries and airports are at risk of losing power this summer because a majority of electric generating stations in California use gas as their primary fuel.

How did we get to this point?

Aliso Canyon

On Oct. 23, 2015, a massive natural gas leak erupted at a storage well near Los Angeles. After attempts to plug the leak had been unsuccessful, SoCal Gas began building a relief well to capture the leaking gas.

“It was a mega-leak, one of the biggest ever recorded,” says Tim O’Connor, California Oil & Gas Director. EDF estimates that the amount of methane leaked had the same 20-year climate impact as burning nearly a billion gallons of gasoline.

Aerial infrared imaging shows methane leaking at a SoCal Gas storage facility. Methane is a potent greenhouse gas. Source:
Aerial infrared imaging shows methane leaking at a SoCal Gas storage facility. Methane is a potent greenhouse gas. Source:

People started getting sick and were forced to leave their homes to escape the methane spewing from the gas leak in the Aliso Canyon Storage Facility.

The California Independent System Operator warns that power companies may not be able to keep up with periods of high consumer demand because the Aliso Canyon gas storage facility is closed. Aliso Canyon will not open until inspections are complete. State regulators will not allow SoCalGas to inject fuel into the plant until the company inspects all of its 114 wells.

Electricity demand is expected to rise during the unusual heatwave hitting California this week. Consumer demand for electricity is projected to top 45,000 megawatts, said the California Independent System Operator (ISO), which manages power flow through the state. That will put stress on the power grid.

Rotating Blackouts

California businesses and homes are likely going to see rotating blackouts. The ISO has imposed rotating outages in 2004, 2005, 2010 and 2015, mostly related to unexpected transmission line or power plant outages during periods of unusually high demand.

Aliso Canyon is the biggest of four SoCalGas storage fields. It provides service to the region’s 17 gas-fired power plants, hospitals, refineries, and other essential parts of California’s economy.

Unlike some other gas transmission systems that can store significant amounts of line pack gas in pipelines, like PG&E Corp in northern California, SoCalGas cannot function with only pipeline or storage supplies.

That makes storage fields much more critical for SoCalGas and the 21 million residents it supports.

Traders that short the market will no doubt be following this story closely. Should 14-day blackouts occur, any company with primary operations in southern California is a potential target.

Fed Bullard Makes Embarrassing Reversal, Says One Hike In 2.5 Years

The Federal Reserve is making a very public and very embarrassing reversal. The latest example is that of Fed hawk Bullard.

On March 27, 2016, Fed hawk Bullard (voter) said that April and June are “live meetings” for the Fed to raise rates. In a Nikkei interview, Bullard said, “The US economy is growing at a moderate pace. I think the labor markets are continuing to improve. I think unemployment will be below, or at, 4.5% at the end of this year, which will be a very good unemployment rate for the U.S. The median unemployment rate over the last 50 years is about 5.8%, so 4.5% is very low compared to that.”

Today Bullard said that the June meeting was not a good time to hike rates and that it is better for the Fed to hike rates following good news. Bullard said that only one more rate hike may be appropriate over the next 2.5 years. Bullard said that before hiking rates again, he wants economic uncertainties to resolve the mismatch between Fed words versus its actions which hurts its credibility.

Folks, these Fed clowns are not going to give us a good read on the economy. They have no idea what is going on from month to month. Hey, there’s nothing wrong with going to the Circus south of the border, but don’t drink the Kool-Aid. Bring your own drinks.

Sofi AI Market Sentiment Gauge

Sofi AI Market Sentiment Gauge

Market is overbought.